Algeria in Ferment -- A Special Report.; In Algeria, Hope for Democracy but Not Economy

By YOUSSEF M. IBRAHIM,

Published: July 26, 1991

ALGIERS, July 23—
Algeria is in a state of turmoil -- some call it a revolution -- that is tearing apart the country's once solid socialist political fabric and plunging it into economic decline.

The drastic changes under way, however, include an astonishing flowering of political diversity that is sweeping aside 29 years of one-party rule by the National Liberation Front in this nation of 25 million, which became independent from France in 1962.

Many Algerians as well as foreign diplomats say they believe that the new openness will lead Algeria toward what could be the first truly democratic elections in the Arab world, setting it apart in a region dominated by benign feudal governments and brutal dictatorships.

Sitting in a cramped office, Omar Belhouchet proudly displays the first issue of his independent newspaper, Al Watan, as he tells the story of how a year ago he "took the plunge," leaving his cushioned job as a columnist for the governing party's newspaper. He created what has become the country's best read and first independent daily.

Along with 19 collegues from the Government-owned Al Moudjahid, the 38-year-old Mr. Belhouchet took a payment of two-years' salary as he quit the paper, and started Al Watan, or The Nation. Today it has a circulation of 130,000, which is close to passing the party newspaper. The paper has many problems with Government-controlled print shops, distribution agencies and syndicates, but virtually everyone in Algeria waits every morning to see what Al Watan has to say.

The editor is not alone. Over the last two years, since Algeria's democratization process began after a major popular outburst of discontent in October 1988 that forced President Chadli Benjedid to end one-party rule and move to multi-party democracy, at least a dozen free dailies and as many magazines have mushroomed. Nearly 40 new political parties have also materialized. Fundamentalists Determined

Not far from Mr. Belhouchet's office, over at the teeming Tivoli flea market in the Climat de France section, Abdelhamid, a bearded member of the Islamic Salvation Front was trying to sell blue jeans and socks smuggled from Morocco and cheap dresses from bargain stores in France and Spain.

But Abdelhamid, who would not give his full name, has his mind on his beloved party, whose leaders were jailed by the army in June after inciting hundred of thousands of their followers to public demonstrations and strikes. It was, most here agree, an attempt to overthrow the Government that was blocked by the army, leading to a four-month martial law edict that was imposed on June 5 and is still in effect.

That has not discouraged Albelhamid or his friends. "They cannot crush Islam," he said. "We are here because these people you see around you all profoundly desire an Islamic government. We will reorganize and we will prevail."

Dressed in a white flowing robe, he flicked a thumb up, a signal to alert several collegues to watch out for police or army forces, who sometimes raid largely Muslim fundamentalist neighborhood.

It is now two months since riots killed 60 people and resulted in at least 3,000 arrests, the imposition of martial law and the suspension of free parliamentary elections that had been set for June 27. The Government of President Benjedid has indeed succeeded, at least for now, in thwarting the grab for power by Islamic fundamentalists.

At least eight of the leaders of the Islamic Salvation Front, are under arrest and awaiting trial, including their leader, Abassi Madani, and Ali Belhadj, the fiery young deputy party leader.

The movement is now badly split, in part by the violent behavior of some of its members after winning 55 percent of municipal and gubernatorial elections a year ago. These fundamentalists began to impose restrictions on social life in their municipalities. They harassed women, asked couples walking in public to produce evidence that they were related, forbade domino-playing in cafes and distributed free lodgings to their adherents.

Now, new Islamic fundamentalist groups have surfaced and are gaining members from the broader movement. Most notable among them is the Hamas Party, whose leader, Sheik Mahfouz Nahnah, advocates co-existence of fundamentalist Muslims with other secular parties in a democratic political structure.

Still, the most evident sentiment here, based on intensive interviews with representatives of all political and social currents, is a profound sense of suspicious uncertainty about the Government's intentions, combined with optimism approaching euphoria over the vastly expanding horizons of freedom.

Prime Minister Sid Ahmed Ghozali, who heads a transitional Government of technocrats installed in mid-June for the duration of martial law with the mission of preparing for free multi-party elections, said at a news conference last week that the parliamentary elections would be held as soon as possible. He and several of his ministers have repeatedly said this is likely to be before the end of this year. Economic Crash Feared by Premier

But the Prime Minister also warned the nation last week that it was on the verge of a "catastrophic" economic collapse.